Customer data collection: How to be trustworthy and transparent

It is a widely reported fact that levels of customer trust in companies have been in decline for years. The annual Edelman Trust Barometer, for instance, suggests that customer trust in companies of all types has fallen significantly over the past few years to the point where only 44% of customers now express trust in businesses.

One of the behaviours that has had the most damaging impact on consumer trust has been company use of personal data. In a recent global study of 18,000 consumers, conducted across nine countries by Verint, with Ovum and Opinium, almost half (48%) of respondents said they were suspicious about how companies used their data.

Elsewhere, in its report ‘The State of the Data Nation’, Informatica surveyed 2,000 UK adults to find that nearly three-quarters (73%) stated they were wary of how the personal information and data they have shared with brands online is being used.

Unsurprisingly, this trend threatens to have major implications for businesses that today are increasingly reliant on customer data for insight and impactful marketing. According to Informatica’s study, for example, more than half (56%) of those who are concerned about the use of the personal data they have shared online with brands and organisations are reclaiming access to it and plan to share less information with brands or organisations over the next three years.

“All the evidence suggests that there is a lack of trust and a lot of frustration,” notes George Kidd, chief commissioner of the DMC. “We could get to the point where consumers’ willingness to give up data, or leave the box unticked, will depend on how businesses go about their relationship. If businesses abuse my trust, then they will act.”

Speaking at a recent industry event, Chris Combemale, CEO of industry body DMA Group, warned: “As an industry, we need to reconnect with consumers on the issue of data and build new relationships based on transparency and trust.”

So how can organisations ensure that they are transparent and trustworthy? What are the best practices they should be following to try to win customer trust back?

Be clear about how the data will be used

In ‘The State of the Data Nation’ study, being transparent about how personal information is used was nominated the top thing that enterprises can do to earn consumer trust, with half of respondents reporting it. In order for them to be transparent, organisations should explain why they want to collect user data, what they do with the data, whether they will sell or share the data and whether they will delete the data when they are asked to.

In the ‘Trust Economy’ report by GBG, 64% of respondents said they look for reassurances that their data will be used appropriately and responsibly, and 67% want to know specifically how it will be used before engaging further.

More than two-thirds of consumers openly admit to sharing bogus data – especially where they didn’t understand how it was going to be used.

“Be up front in what you are collecting – and why,” advises Karyn Bright, group marketing director at GBG. “Our survey revealed over half of businesses (59%) admit they collect data which is not used or even useful to the organisation. Consumers know this and increasing numbers are actually ‘dirtying’ their data when completing registration forms or surveys because they don’t want to be targeted with irrelevant information. In fact, more than two-thirds of consumers (67%) we surveyed openly admitted to sharing bogus data – especially where they didn’t understand how it was going to be used.”

Explain the benefits of sharing data

Traditionally, businesses had the upper hand in the company-customer relationship - they had products or services to sell and, if you wanted these, you had to pay, whether that involved cash or sacrificing data. However, nowadays consumers are increasingly savvy and know that the balance of power has shifted. Therefore, they are more discerning about with whom – and when – they share their genuine identity information. This means that the onus is on organisations to explain why sharing data is in the best interests of the customer and how it can help them. For instance, the likes of Foursquare could explain that they are asking users to share their likes and interests so that they can better deliver location-based recommendations based on these preferences.

“The most forward-thinking companies are looking at customer engagement across the entire life cycle – and not just as a marketing exercise. Storing customer data for the benefit of the customer has to be the mantra,” says Bright.

“We work with a whole variety of businesses to make sure they are collecting, verifying and analysing personal information properly – those that do it really well are, unsurprisingly, those where customer engagement is a focus from the top down. The Guardian newspaper, for example, has a really open and clear strategy about using readers’ data to hone their insight and provide relevant content and advertising back to their readers and viewers. They have been transparent about the fact that they value their readers’ data as they would any financial asset.”

Demonstrate how data will be kept secure

The State of the Data Nation’ study revealed having a clear privacy policy in place (43%) was the second most important things that enterprises can do to earn consumer trust. Therefore, organisations must be proactive about defining their security priorities, and then sharing these with customers.

“The first thing businesses should do is fundamentally re-assess their security procedures in order to confidently reassure customers that they are able to defend their assets,” recommends Greg Hanson, vice president business operations EMEA at Informatica. “Brands also need to ensure they have comprehensive regulatory programmes in place. EU data regulations are set to become increasingly strict in the coming months with new legislation coming into effect, so compliance will act as a trust marker for consumers.”

Marketers must look beyond complying with the law and standards of best practice to complying with their customers’ wishes.

But Kidd believes that businesses should “look beyond the law”.

“Consumers don’t focus on whether or not marketers are or are not breaking a law or regulation. They are angry when they feel deceived or misled when their requests for privacy are ignored and when they think their personal information is being sold on,” he says.

“Marketers therefore must look beyond complying with the law and standards of best practice to complying with their customers’ wishes. Doing so is essential for creating effective marketing, earning consumer trust and preventing complaints.”

It could therefore be appropriate to appoint a privacy officer. Axel Schaefer, senior manager, strategic marketing EMEA at Adobe Systems, explains: “We recommend you assign a privacy officer […] that is aware and responsible of respecting legal requirements. Modern technology is able to measure close to every interaction with a brand, at least on a digital level – however, it always needs a human aspect to restrict oneself from misusing these possibilities. Very clear corporate data guidelines are essential to enforce the discipline on an operational level and with suppliers, too.”

Give customers greater control over their data

“Reassuring customers in the long-term is dependent on taking proactive steps to be more transparent about data use,” says Hanson. “Companies need to boost confidence by taking the time to listen to what their customers want and responding quickly and appropriately. For many customers, data transparency comes hand in hand with control. Social media companies in particular are seeing greater demand from consumers for control over the storage and archiving of their information, as well as when and how permanently it is deleted.”

Part of this control given to customers should also enable data subjects to access their data and correct any inaccuracies.

In its report ‘Digital creepiness: How not to spook your customers’, Forrester Research recommends developing highly granular preference controls to give customers as much control over their data as possible. It notes that ‘preference panels’ are playing an increasingly important part of the mobile app and website experience, as customers demand a more customisable experience from brands. Forrester suggests this will only increase, as the option gives a more transparent and trusting element to a business, as customers can choose at a granular level how much personalisation they are comfortable with.

Simplify the collection procedure

“Brands need to put in some thought into the customer data collection process to make sure that consumers feel comfortable,” says Kevin Tan, CEO of Eyeota. “Most advertisers typically issue a disclaimer when collecting data to inform the consumer what type of data they are collecting and allow consumers to opt out. This ensures that consumers are well aware of the value tradeoff for better CRM and relevant advertising.”

Part of simplifying the data collection procedure involves making terms and conditions clear and easy to understand – something that businesses are not necessarily good at.

Terms and conditions for online services and products are in many cases hidden, long and difficult to understand or even misleading.

“Terms and conditions for online services and products are in many cases hidden, long and difficult to understand or even misleading,” highlights Professor Udo Helmbrecht, executive director of ENISA. “We recommend that companies and public sector bodies review their privacy policies and create simple more effective methods of communicating these to consumers. We believe that terms and conditions should be more concise, easy to understand and companies should help customers take control of their data.”

Winning back trust

But with levels of consumer trust plummeting, can businesses ever really win back customer confidence in their use of data? Or is all of this merely an exercise in damage limitation at this point?

“Our world is changing too rapidly for anyone to be able to commit to ‘never’,” says Bright. “Brands recover and consumers tell us they actually want to share data with organisations if it means they’ll get services easier and faster. At the moment only 30% of consumers believe the benefits of providing personal data outweigh its risk and only 10% think that they themselves really benefit from any sharing of personal data.

“The challenge now is: can organisations commit to using data for the good of the customer? The technology has been around for ages, but it needs a cultural mind shift that sees data as an extension of an individual identity and not just a commodity.”

Hanson concludes: “Regaining consumer trust is not out of reach for businesses. However, getting to a point where customers feel completely happy and secure in the way their data is treated will take dedication and investment.”

About Neil Davey

Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.

Replies

Good one, Neil. And you're dead right - simplify the collection procedure. One of the key things is to be a lot clearer in your comms (might as well state the obvious!) then get ready to respond to questions. We've seen a client do this recently. They needed to get customers to default opt in to a policy. They'd always used the usual slightly opaque, formula language to do this. They didn't get many questions, but they got a LOT of kickback when the policy bit. When they changed to a clearer, simpler explanation they got more - not fewer - questions. But they got a lot less kickback and noise.